Bribes, Rents and Industrial Firm Performance in Albania and Kosovo

Luca J. Uberti ()
Additional contact information
Luca J. Uberti: University College London

Comparative Economic Studies, 2020, vol. 62, issue 2, No 6, 263-302

Abstract: Abstract Using data from a novel representative survey, we examine how corruption affects the performance of industrial-sector firms in Albania and Kosovo, two low–middle-income post-socialist economies in the Western Balkan region. Bribes are costs that firms incur to “grease the wheels” of the bureaucracy and/or to seek rents. Rents, however, may improve firm performance. Thus, to estimate the total effect of corruption, we develop and collect a set of perception-based indicators of both corruption and rents. In addition, we allow both bribery and rents to affect output growth through multiple channels—by influencing the firm’s investment and hiring decisions, by affecting total-factor productivity and by modifying the marginal product of factor additions. We find that, in Albania and Kosovo, bribes and rents have both positive and negative effects on firm performance. The net effect of corruption, however, is negative and large and is not fully offset by the beneficial effects of rents.

Keywords: Corruption; Rents; Rent-seeking; Industrial policy; Transition; Western Balkans (search for similar items in EconPapers)
JEL-codes: D22 D24 D72 D73 L52 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1057/s41294-020-00112-5 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:compes:v:62:y:2020:i:2:d:10.1057_s41294-020-00112-5

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-020-00112-5

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().